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Selfie touch-up app Meitu gauges interest in US$750m IPO

Mon, Nov 21, 2016 - 1:23 PM

[HONG KONG] Chinese mobile developer Meitu Inc started testing demand for a proposed Hong Kong initial public offering of about US$750 million, which could become the city's biggest technology listing in nearly a decade.

The Xiamen-based company, which makes apps used to touch up selfie photos, will gauge interest from potential investors from Monday through Dec 2, according to terms for the deal obtained by Bloomberg.

Meitu plans to use about 35 per cent of the IPO proceeds to expand its smart hardware business, while around 25 per cent will go toward strategic investments and acquisitions. Meitu hasn't set a target listing date or decided when it will began taking orders for the share sale, the terms show.

The stock offering from Meitu could become a test case for Chinese technology companies seeking to list in Hong Kong. A government crackdown on backdoor listings has made it tougher for businesses to raise money in mainland China, while some entrepreneurs believe US exchanges don't offer high enough valuations for their businesses.

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At US$750 million, the Meitu listing would be the biggest Hong Kong first-time share sale by a technology company since Alibaba.com Ltd's US$1.7 billion offering in 2007, data compiled by Bloomberg show.

Meitu plans to gauge demand this week from investors in Hong Kong, London, New York and Boston and will conduct calls with Singapore money managers, according to Monday's terms.

The company will meet select Asian investors next week, before starting a formal management roadshow at a later date. It plans to earmark about 15 per cent of the IPO proceeds for sales and marketing, the terms show. Meitu will also use some of the money to expand its internet service and fund research and development.

Morgan Stanley, Credit Suisse Group AG and China Merchants Securities Co are joint sponsors of the offering, according to a pre-listing filing with the Hong Kong stock exchange.